Russia: Total Energy exercises force majeure on Arctic LNG 2

Published on January 16, 2024 at 7:00 pm

PARIS, Jan 16 (Reuters) – Total Energy announced on Tuesday that it has launched a force majeure process over Arctic LNG 2 due to US sanctions against Moscow, which will not allow it to take delivery of volumes of liquefied natural gas (LNG). Produced by the Russian project this year.

The United States in November introduced sanctions against Arctic LNG 2, a key element of Russia’s strategy on the global LNG market, where it wants to increase its market share from 8% to 20% by 2030.

TotalEnergy said in a press statement, “We have initiated the force majeure process in accordance with the contracts in force, and we will respect the applicable approval systems in accordance with our principles of action.”

“As a result, Total Energy has no plans to remove LNG from Arctic LNG 2 in 2024,” the French group added.

TotalEnergies, which has a direct 10% stake in Arctic LNG 2, announced a decision not to record proved reserves for the project in 2022 due to uncertainties raised by the European, along with a $4 billion provision in particular. Sanctions against Moscow are linked to the war in Ukraine.

The daily Kommersant indicated in late December that the French group and the other foreign shareholders of Arctic LNG 2 – Chinese state oil companies CNOOC Ltd and China National Petroleum Corp (CNPC), as well as a consortium and company made up of Japan’s Mitsui and JOGMEC – had declared force majeure.

The project is controlled by Russia’s largest LNG producer, Novatek, which owns 60%.

According to two industry sources interviewed by Reuters, Arctic LNG 2 should load its first LNG tanker for Asia in late January but the volume should be low due to restrictions. (Reporting by Benjamin Mallett; Editing by Nicolas Dellem)

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